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Given the following:

  • Cost price of an item is 100.00 (NOT including tax)
  • Margin of 10%
  • Tax of 8%

What is the formula for finding the selling price that will meet these requirements? The final selling price INCLUDES tax of 8% and the margin must be 10%.

The selling price in the example above is 118.80 (I came up with this via guessing).

The tax on 118.80 is 8.80 leaving a margin of 10%.

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2 Answers 2

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I have solved it by doing:

    var X = cost_price;
    var Y = margin_percent;
    var Q = tax_percent;

    var margin_price = (Q*X*Y+100*Q*X+100*X*Y+10000*X)/10000;

This is probably not the best way to do it; but this is what I came up with... My algebra skills are a bit rusty so there is probably a better way.

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You can do

Selling price = 100/(1-0,10)/(1-0,08) = 120,7729

Now:

Tax = 120,7729 * 0,08 = 9,6618

Margin = (120,7729-9,6618) * 0,10 = 111,1111 * 0,10 = 11,1111

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